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tv   The Willis Report  FOX Business  February 5, 2013 6:00pm-7:00pm EST

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>> this is the first year in which they included, they do this in the beginning of the second half. we have to imagine they have some sort of insurance policy, don't you? >> the odds were so low. melissa: they did have an insurance policy. >> at the end of the day it is about $700,000 worth of merchandise. somebody will tell you anything. melissa: that is right. you can make a synthetic instrument for anything only costing 10 grand. with everybody getting the flu these days, you may want to think about showing up sick. when you go into an office sex, more than half of the services will be contaminated by lunchtime. i want to vomit now.
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>> i was sick on friday, i think i got everybody sick. you have not been to the breaking news desk. on friday, that is where you would have gotten it. melissa: don't touch anything. i'm going to bring whites and spray everywhere i go. >> it is legal. melissa: on that happy note, that is all the "money" we have for you. we will see you back here tomorrow. gerri: hello, everybody, i am gerri willis. tonight on "the willis report." a new federal tax policy. the latest push in congress to make marijuana legal and tax it. president obama proposes a short-term fix to delay automatic spending cuts one day after he blows another budget deadline. and the shocking proof union
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leaders just want more power, not power to the people. "the willis report" is on the case. all that and more coming up later, but first, the top story tonight, building in washington can change, totally remake current marijuana laws. including legalizing industrial production as well as establishing a federal pot tax. lawmakers on both sides of the aisle worked away on these bills, one of which introduced just today by two democratic congressman. both of them calling for an end to federal pot prohibition. will it work? joining us now, drug policy visor and founder and executive director of the drug policy alliance. starting with you.
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melissa: it is a lot like the appeal of alcohol probation. if it doesn't work, it is not effective and they say it is costing tens of billions of dollars every year, diverting precious law-enforcement resources, funding organized crime, so a lot better to have a smart, cynical regular tory policy with the state governments controlling it in the fed provide a motive of control. gerri: is this prohibition all over again? >> if only it was so easy. they have zero chance because essentially we are seeing them take up the barney frank mantel, those were the two previous representatives that did this, and it is the extreme right in d the extreme left coming together. we see the extremes a lot of issues oftentimes, the mainstream on this issue is marijuana can be harmful drug especially to young people. the last thing we wants to do is
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legalize it and normalize it. for every dollar we get in this country we spend $10 in lost social cost so people who look at this notice is not going to work, i would not make too much of this. gerri: let's drill down into the bill but the congress is putting out, he wants to regular marijuana the way the federal government regulates alcohol and to nationalize the regulation of pot, get back to the states, growers would need a federal permit, the bureau of alcohol and tobacco, marijuana and firearms. >> the pro-marijuana lobby is getting a lot of money to talk about this. the reality is marijuana can be harmful drug for a lot of people, doubling her car crash risk, we don't need any of these extreme policies. we can reform the worst part of the policies, people should not be locked up in jail, few people
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do for small amounts of marijuana but don't heavily wite to legalize marijuana for this. gerri: is marijuana a gateway drug? >> it is more of a gateway drug when it is illegal because they go to the same drug dealers. they separated out commie taunts that effect. it is that regardless of the pool editions being chicken on this with a few exceptions so far, you have over half the country now saying let's legally merrilregulate marijuana. they say that pouring money down the drain. gerri: let's show a map here because we have 18 states in d.c. already allowed medical marijuana to be legal, so there's a lot of the country already on this page. >> that pro-marijuana lobby has
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pushed medical marijuana. it is 32-year-old white male with no history of chronic illness in the history, that same movement. >> 70% says it is time to legalize marijuana. melissa: the fact that these congressmen are saying we have $16 trillion in debt, a trillion in the hole this year alone with our deficit, this is a great way to raise tax revenue. let me finish, it would charge an excise tax of 50% of the first sale. 50% of your first dollar would go right to the government. pay $1000 annually just for being tax producers, and they would require the irs to produce a study of industry after two years.
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once you get the irs involved, my friend, we are talking about a full one industry that will be taxed and it will never go away because the irs is going to want to get money from it. what do you think about a federal tax on marijuana? >> at this point it is premature because only two states down the road could be a good idea, but it is mostly about the states. federal tax on marijuana. i'm talking about blumenauer. is that whe the one you like? >> yes. let's allow the state to legally regulate that stuff. let the states tax them. >> or heard about it for lottery, gambling, tobacco, alcohol, we spend more on the social cost of the problems.
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gerri: what do you mean? let's have an answer. >> talk about the lost productivity, department of justice reports in this administration released a report $193 billion illegal drugs cost the u.s. every year. alcohol 200 billion, tobacco about 190. his >> quite a bit more dangerous, the cost of alcohol and tobacco. gerri: unfortunately we are going to to leave it there. the shouting is over for this hour. thank you for coming on tonight, appreciate your time. now we want to know what you think. should marijuana be legalized and taxed? vote on the right-hand side of the screen and we will show the results of the show. lots more to come including a big déjà vu all over again in washington. and the justice department taking s&p to court saying they are to blame for the financial
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crisis, so why now is this payback by the white house? i will break it down next
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gerri: in the world of banking and finance, rating agencies opinion is the last advice the big money guys put down their dough. so it is important. u.s. justice department tha dept the nation's biggest agencies with a billion dollars lawsuit saying it did a shoddy job rating mortgage bonds. in his defense are expected to argue what it says can't be attacked because the first amendment right. i don't know who i'm more surprised by. the justice department or the
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s&p. five years after the event you suddenly find a rating agency asleep at the wheel. so is everybody else that financial crisis for home buyers become mortgages they couldn't afford the bank issued them to the investors who lapped up every bit of housing investment they could put their hands on. the rating agencies could have stopped the merry-go-round, they could have said it was obvious among a handful of investors individual mortgage of supporting these investments were junk. not worth the paper they were written on, but the agency didn't do that, but different from the banks or the borrowers, their job is to write investments. estimate their value, their worthiness but they didn't stick their neck out and they didn't do their job or run against the% tide. the first amendment defend themselves is ridiculous. docking there is possibility hiding behind the constitution. the mistakes that cost us our plenty.
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we pay more than $187 billion to bail out for fannie mae and freddie mac. homeowners lost seven and a half trillion dollars in equity. 60 million homes went into foreclosure. to be sure, homeowners may mistakes bu with but they paid g forced out of their homes. banks have paid a price and a never-ending list of attorney general's hit them up for foreclosure settlement money by the rating agencies got off scotch free until yesterday. coming up, more on the blame game. telling me if the free speech defense could work. all stations come over to mission a for a fifinal go.
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gerri: the u.s. government blaming their part of the financial meltdown that the rating agency said it did nothing wrong and have an interesting defense. i'm in now, former federal prosecutor, great to see you, thank you for having us. what is the government saying? >> the government says the brothers under a a law that says basically they're saying s&p defrauded institutions such as banks federally insured giving them jurisdiction. not a criminal case, but that is a defrauded these institutions by getting aaa ratings. gerri: here's what they say from the lawsuit. increase revenue and market share, down play and the credit risk in order to favor the
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interests of large investment banks and others. they say you have it all wrong, lawsuit would be without factual or merit. it would be wrong and contending s&p ratings motivated by commercial considerations and not issued in good faith. when you look at that, does that ring true to you? >> tell you what, what they put in there about being motivated by profit with a little bit of a cheap shot. every corporation in america is motivated by profit. the question is whether or not they intended to defraud people. roughly $13 million, so i thought that was kind of a cheap shot by doj. gerri: the s&p says we are exercising our first amendment freedoms. do you buy that? >> not really. if i were to tell you how does making a movie about my life i
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need a million dollars to invest in this deal with me and you give it to me, that is a fraud, a complete fraud, right? buput that aside for a minute. it is speech. gerri: the other big questions come into play today, it is very likely, very possible that the people downgrade the debt again. some people say eric holder is holding their feet to the fire on this one and that is the pressure point they're going after right now. is this lawsuit, to be a quid pro quo. do you believe that? >> don't want to believe that. the proudest day of my life was when i became a civil attorney. it would turn my stomach if they were used for the administration, but there is a lot of red flags here.
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they gave the same ratings at the exact same time, they haven't been sued, the s&p was only one who downgraded the government's rating in 2011 and there are lots of things that bothered me. why pick on s&p? gerri: that is one that a lot of people are making today. i wanted to get your reaction, they had their view o on the rating agency and if they should be to blame. agencies were essentially the wheel of finance th that the std key enablers of the financial meltdown, true or false? >> that is a great soundbite, and soundbites are great for lawyers like me talking on tv. but they did not win lawsuits, you have to have evidence and facts of law. i can point to 100 different other things as you pointed out at the top of the segment resulted in this kind of financial perfect storm, so to
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say they were the cause, were they responsible? yes. gerri: they were the last stop, right? the last potential break in thie system. they did wrong things. the banks gave them these mortgages. at the end of the day they were looking for advice on whether the mortgage debt with a good investment or not, s&p, moody's, they said sure, we all like it. >> altogether, i agree with you. if they had all done their jobs, perhaps this could have been avoided. think of this, that come out and said this is junk, saying we are giving aaa ratings for this kind of stuff, that is not going to set off a single problem or stop this from happening so i get what you're saying.
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go through all of them. gerri: maybe they will. what do you expect? years and years of litigation, millions of dollars spent on ridiculous attorney fees. >> it is the lawyer's fair employment act. you can hear the buzz saws cutting down every tree for 10 million pieces of paper, okay? at the end of the day they will argue and fight until the case for a couple hundred million dollars in delegation of no wrongdoing. melissa: thank you for coming on tonight. >> thank you. gerri: another warning of spending problems and president obama misses the deadline to submit a budget. can you believe that? but here's not miss the opportunity to place blame. our panel weighs in next. ♪
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ally bank. your money needs an ally. >> from the fox business studios in new york city, it's "the willis report" with gerri willis. gerri: the congressional budget office released in the fiscal for the next 10 years providing a look at how the deb deck is affecting the economy. rich edson is in d.c. with details. >> good evening. in the long-term, it is slowing us down. rational budget office forecast and $845 billion budget deficit this year, the first of less than a trillion dollars in five years. annual deficit deficit continueo shrink until 2017 when interest in health care costs increase deficits. in the next 10 years the u.s. will add almost $7 trillion to the national debt and totaled $26 trillion by 2023. while the national debt compared
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to the size of the economy stabilizes over the next decade, climbs much higher in the future. the director says the primary culprit, health care spending. >> we still see substantial growth in federal health care spending over the coming 10 years and beyond. that is importantly because the number of people who will be eligible for medicare will be rising very sharply. >> as the economic forecast, expecting gdp to expand 1.4% this year, 3.4% next year, average 3.6% to four years after that and slowing beyond there. expecting unemployment to average 8% this year and 7.6% next year, marking six straight years above $0.7.5, first time that has happened in 70 years. the recent tax increases and spending cuts on the economy, the office says they will cost one and a quarter percentage point to gdp and one half to
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2 million jobs this year though with deficits reduce its boost growth and employment in the future. gerri: rich, thanks for that. while the cbo was warning of long-term debt, president obama tried to put the squeeze on congress to push spending cuts and more tax hikes to avert the looming automatic cuts. with more, what do you think of the president, the president's suggestion, does he have it right? >> no, don't think he has it att all. he sequesters cuts last for 10 years. here's the president throw in tg the projections under the bus and saying we can't do these cuts into question because they are too deep and will harm the economy. either the cbo has it right or the president has it right, you can't have it both ways. gerri: i would assume the president doesn't have it right
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here. is there any other way to get big cuts, and we have to take the sequester, what is the right thing to do here? >> senate democrat says democrat over right now. the senate house democrats are going out in virginia. they think there's a way to do this but we have to get serious about what is really driving the deficitdeficit and that is heale costs and right now the president is not serious about making spending cuts. he thinks he can raise taxes and lower the deficit, but at the end of the day we all know what is driving the entitlement and the president doesn't want to touch it. we will continue with these astronomical deficits. gerri: astronomical deficits, but i look at what the cbo is saying about the economy, it is really scary. >> i agree. growth for this year 1.4%? that is rarely the heart beating at all. 1.9% last year, and talking 8%
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unemployment again through this year and up to 3% next year, but i think that is a very optimistic projection on their point. why would you expect the economy to grow at greater than 2% going forward after next year? i will tell you this, it will create a political problem for the president because of the uncommon trait gets up to eight and above, democrats are going to start to get very nervous, his approval rating begins to fall and people will separate themselves from the president. gerri: use of the democrats are on a retreat. another start talking about tax increases, that is what you keep hearing, we need more tax hikes, it is not really spending cuts we need here. when are they going to back off the tax hikes? they don't seem satisfied with it. >> no, they don't, they don't have to cut back spending in a serious way. they don't see the growth in
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medicare and medicaid spending as a problem. even though at the rate we are going we will be in an assisted living home until he cannot afford it anymore. by continuing to push these tax hikes, they are creating uncertainty in the private sector because they don't know what it is that will come down to them and until they have any sort of certainty, we will not grow the private sector and basically the president kicked the can down the road and the budget is heard in the private sector and until we pay more attention to the private sector, growth is going to be stagnant. >> i totally agree. the problem for the democrats is contemporary democratic party has essentially separated itself from the private economy. they're now about the public economy and all of these programs they have created, or only thing they seem to understand and care about right now. the private economy is either on
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its own or its job is to send revenue by tax increases to the public economy. the two parties could not be farther apart and i suspect we will see another year of fiscal gridlock because they simply are not singing from the same handle. gerri: i don't think they're in the same church, county, town. talking about all this money to the public economy, what about the private economy? this is where it has a jumpsta jumpstart. he said the growth would be under 2%, 1.4% this year, everybody is on the sidelines, they don't want to commit to anything. not just in washington which we're all used to complaining about but also the ceos office, cfos office, they don't want to do anything either. >> nobody wants to do anything because they are unsure what they have to pay for five years down the road if you're a small business owner. small business is the engine for
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the private sector. until we have any kind of certainty based on kicking the can down the road that goes on in washington, this will continue. the sad part is when the growth is so low, people just put more people there and have a bigger dependency. the private sector may never get off the ground unless we break the thinking government is the answer to all of our problems. gerri: spending cuts, do we take the sequester, $85 billion total, that the right way to do it? >> i think it probably is the right way to do it, gerri. united states has to send a signal to the private sector and the world, the rating agencies that we are capable of cutting their spending. the alternative is a continuous upward path and until the united states prove they can reduce public spending, europe, the rest of the world is not going to do it in the world economy will grow at an acceptably low rates long-term.
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gerri: it is all gimmicks, fake outs. interesting to say. we have t had to slow down the trajectory of growth but that is all we talk about, we never talk about real cuts. thtalk about slowing down the growth. they are two different things. >> that is why we actually got into the sequester in the first place because we knew we would make a deal so awful we would have to negotiate but the president doesn't want to negotiate. have to agree, till somebody comes forward with a better plan, we will have to go through sequester because we have to send a message to the rest of the world you have to balance your books. gerri: i don't like it. thank you for coming on tonight, a pleasure seeing both of you. thank you so much. >> thank you, gerri. gerri: washington debates the federal budget, our household budget are getting hit hard by the gas prices. on average nearly 4% of your
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income goes to filling up the tank. in 2008 became pretty close. come out to each household paying $3000 per year on gas. as a result, many are changing driving habits to save some cash including driving further to find cheap gas, waiting in longer lines and stations with cheaper gas kept within the shortest route to the gas station. it doesn't help we're spending so much time stuck in traffic. american commuters spend a full work week stuck in traffic in 2011 that congestion comes with a heavy price tag, more than $800 for each motorist and wasted gas, lost productivity and increased vehicle maintenance costs. they cost more than $3.50 per gallon, that adds up. if you think you have it bad in los angeles, san francisco, new york, boston, it could be worse.
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drivers in the nation capital spent 67 hours per year stuck in traffic. that is nearly three days of your life out the window stuck in traffic. i would go crazy. the rising price of gas is a result of our ineptitude of the nation's leaders. there are things we could do right now let's improve the keystone pipeline, with some in washington not mentioning any names refused to do. a look at what you're missing if you're not investing right now and unions are not going down without a fight. labor leaders in michigan getting numbers by any means necessary. details next. ç@2x@x@x@x@x@x@@ great, everybody made it.
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we all work remotely so this is a big deal, our first full team gathering! i wanted to call on a few people. ashley, ashley marshall... here. since we're often all on the move, ashley suggested we use fedex office to hold packages for us. great job. [ applause ] thank you. and on a protocol note, i'd like to talk to tim hill about his tendency to use all caps in emails. [ shouting ] oh i'm sorry guys. ah sometimes the caps lock gets stuck on my keyboard. hey do you wanna get a drink later? [ male announcer ] hold packages aany fedex office location.
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gerri: big labor in the state of michigan battling it out until the bitter end. strategizing ways to avoid the states newly minted right to work law even at the expense of its own workers. joining me now, labor policy director for public policy. thank you for coming back on the show, it is great to have you here. i was blown away by this story. somebody's really red-faced as the union, that is for darn sure. an example of some of the things said by this union. members who indicate they wish to resign will be told they can only do so in august. we will use any legal means at our disposal to collect the dues owed. are you surprised? >> no, not at all. it is not very surprising, not
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very good, but the fact that the entire memo detailing strategies to how to keep membership and all that was lawsuits, fighting the bill which was no surprise, but the fact they are throwing their members under the bus using any legal means at their disposal to keep the members from paying dues and not a word in the mama was why don't we shape up our act, serve our members better so when they have a choice, they stay with us. not a word of that, just push, push, push, push. and it is not good. gerri: no okay, this is a right-to-work state. pedal to the metal on all of the old ways of doing business, i guess, so let me read you another quote. members who indicate they wish to resign, again from the memo, will be told -- sorry, just read that one. bargaining strategies, you want
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to get around the law, that's what you're going to do? >> that is what they're doing. they're getting secondary contracts between the union and the school districts, especially the school district because steve cook's memo where they are extending the contracts for the security clause to just the clause where the union member has to pay the union and can't exercise their right to work right. extending those clauses up to 10 years and it has nothing to do with wages, benefits or working conditions, simply preventing workers from getting the right to work right for 10 years. and you tell me, is that good for membership are putting the worker first or is that the union saying we want ours and we will do everything we can to make sure we're getting ours before the law goes into effect. gerri: is there any reaction
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inside the union membership against leadership? you have to think at some point people will not like these kind of tactics. that has to be offputting. >> they saw freedom coming two months from now, and now the unions are trying to take it away and extend those contracts for almost a decade. there is a lot of workers who feel like the rug is being pulled out from under them. gerri: let's talk about the kind of impact right to work can have it extended to all the states. what of all the country was right to work, what would it mean to our economy? >> in the 24 states specifically the 22 right-to-work states before indiana and michigan gave workers freedom last year you see higher wage growth, higher population growth, and when you factor in cost of living, workers in those states are
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actually making more. not just worker freedom, but from an economic standpoint right to work is helping workers. gerri: the governors are able to bring more companies into those states, more job opportunities. a big debate is a if at the endf the day these people make a lot more money but what we do see is more economic opportunity, that is for darn sure. thank you for coming by tonight, great conversation. we will have to keep our eyes on the union bosses memo. appreciate it. >> thank you, gerri. we have the detailing of all of these. gerri: we will put a link on our website. that was fun. lights camera action. on this day back in 1919 the united artist was created to get a better control over distribution films.
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do you remember these? they joined together to create their own film studio and united artist flourished. by the 1950s independent production became so popular, they began to fail. to say the company, trans mare can corporation bought them in 1967. 14 years later they sold it to mgm for $300 million. some of the best pictures winners are united. in the $700 million in revenue, and jim still has complete ownership of united artist created today 94 years ago. still to come later in the show, two cents more on unusual jobs being created by obamacare and more whiplash on health care.
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should you sit this out or should you play? advice next.
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gerri: more and more investors are dumping their bonds for stocks. but my next guest says he couldd be missing out.
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gerri: i have whiplash. the stock market on a heck of a ride lately. one point shy of triple digits on positive housing news and encouraging economic news out of europe after all three industries solve their biggest declines yesterday. joining out his thoughts on whether to sit this out or write
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it out. i'm sure you hear this and the folks listen to your radio show, what are you telling people to do right now? >> get excited. this is the beginning of a major sustained long-term bull market. they talk about this for years it was coming and here we are. i don't want you to miss out by sitting on the sidelines. gerri: i love the optimism. still, they will think the market is doing anything at all. it is touchin astonishing to mey are dialed out the stock market. >> it is the rodney dangerfield market. it gets no respect. people are remembering with, the horrific losses they suffered in 2008 and they fail to realize that was five years ago, get a
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grip, people, that is ancient history by wall street standards. since then the market has doubled in value. gerri: you are starting to see that, tell us about that. >> ever since 2008, from 2008 through the end of last year we saw net outflows of the stock market. people were selling them and moving the money to cash and bond funds but suddenly somebody flicked the light switch starting the beginning of this year we are seeing massive inflows to the stock market and people are realizing the world didn't come to an end. the united states didn't collapse, the mayans were wrong. i am five years closer to my retirement, better get on with it and people are now coming back into the market, over $2 trillion in cash and if the it will cause stock market to skyrocket.
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gerri: i know some of these people who are naysayers, understand their concerns, insider trading. but companies like procter & gamble, insider trading rampant. flash crash, moves in the market, 70% of the volume on the nyse, these crazy guys, no logic for computer programs that they are running willy-nilly. they are running the stock market, why should i get involved right now? >> none of that has to do with your investment strategy. the first occurred in 1792 when alexander hamilton absorbed the debt from the revolutionary war. the very first ipo was a victim of the first insider trading case. so what. as far as the nonsense going on, this stuff happens all the time.
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occurring in 2006 lasted one day, actually 10 minutes and the difference between the waves of the ocean and the tide of the ocean. gerri: if you are in for the long haul, maybe have time to wait out the flash crash and can have enough patience to walk past, move past the insider trades, but all of this excitement over this line in the sand, we'r where only back to we we were five years ago. i think that is what is disappointing about it. i have been here before, people, let's move higher than this. >> and we will. the market doesn't move like a bank cd. it moves up and down. over history it goes up a lot more than it goes down. gerri: i am a big fan of stocks and a lot of people are very
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nervous. thank you for coming on tonight, appreciate your time. we talk a lot on this show if college is worth the price of admission especially when you see these numbers. an average debt of $23,000 for public school, $29,000 for private university and that is just the average. but a growing number of schools that offer more bang for your buck. 75 public and 75 private colleges that make up the best value schools from princeton review. a well-regarded list. graduates are only about $21,000 in debt as both kinds of universities. number five, ucla. the average debt of half the students who borrow money is less than $19,000. number four, this college is a steal for in-state students, the total cost of everything it's only about $22,000 with plenty
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of aid available. number three, new college of florida, less than 1000 students in everett loan for freshness just over $4000. average debt just over 14,000, everything is in. unc chapel hill. the average debt less than 18 grand, and the number one best value college is the university of virginia. around $18,000 in almost 100% of students who apply are granted some sort of aid and helping 87% of the 15,000 students graduate, that is an important number. for the rest, log on to our website, gerriwillis.com. we will be right back. all stations come over to mission a for a final go.
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gerri: their is a movement brewing in washington right now to change federal matt -- marijuana laws including plans to legalize pot and creat

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